Corporate Restructuring and Bondholder Wealth

L.D.R. Renneboog, P.G. Szilagyi

Research output: Working paperDiscussion paperOther research output

480 Downloads (Pure)

Abstract

This paper provides an overview of existing research on how corporate restructuring affects the wealth of creditors.Restructuring is defined as any transaction that affects the firm's underlying capital structure.Thus, it reaches well beyond asset restructuring and includes transactions such as leveraged buyouts, security issues and exchanges, and the issuance of stock options.The analysis identifies significant gaps in the literature, emphasizes the potential differences between creditor wealth changes in market- and network-oriented governance systems, and provides valuable insights into methodological advances.Many issues obviously remain, as empirical evidence is still incomplete and focuses exclusively on the US.In network-oriented regimes, the potential for research remains constrained by the lesser development of bond markets that disclose information on creditor wealth shocks.Still, on-going debt securitization should now allow for the investigation of at least some critical issues.This is imperative, as the position of creditors in the firm differs substantially across governance systems despite the gradual convergence of these regimes across the world.
Original languageEnglish
Place of PublicationTilburg
PublisherFinance
Number of pages29
Volume2006-23
Publication statusPublished - 2006

Publication series

NameCentER Discussion Paper
Volume2006-23

Fingerprint

Wealth
Corporate restructuring
Bondholders
Governance
Stock options
Leveraged buyouts
Debt
Empirical evidence
Assets
Security issues
Securitization
Capital structure
Bond market

Keywords

  • bondholder wealth
  • corporate restructuring
  • mergers and acquisitions
  • event studies
  • bond returns

Cite this

Renneboog, L. D. R., & Szilagyi, P. G. (2006). Corporate Restructuring and Bondholder Wealth. (CentER Discussion Paper; Vol. 2006-23). Tilburg: Finance.
Renneboog, L.D.R. ; Szilagyi, P.G. / Corporate Restructuring and Bondholder Wealth. Tilburg : Finance, 2006. (CentER Discussion Paper).
@techreport{760257ae6086414d9ace505b22ae6007,
title = "Corporate Restructuring and Bondholder Wealth",
abstract = "This paper provides an overview of existing research on how corporate restructuring affects the wealth of creditors.Restructuring is defined as any transaction that affects the firm's underlying capital structure.Thus, it reaches well beyond asset restructuring and includes transactions such as leveraged buyouts, security issues and exchanges, and the issuance of stock options.The analysis identifies significant gaps in the literature, emphasizes the potential differences between creditor wealth changes in market- and network-oriented governance systems, and provides valuable insights into methodological advances.Many issues obviously remain, as empirical evidence is still incomplete and focuses exclusively on the US.In network-oriented regimes, the potential for research remains constrained by the lesser development of bond markets that disclose information on creditor wealth shocks.Still, on-going debt securitization should now allow for the investigation of at least some critical issues.This is imperative, as the position of creditors in the firm differs substantially across governance systems despite the gradual convergence of these regimes across the world.",
keywords = "bondholder wealth, corporate restructuring, mergers and acquisitions, event studies, bond returns",
author = "L.D.R. Renneboog and P.G. Szilagyi",
note = "Subsequently published in European Financial Management, 2008 Pagination: 29",
year = "2006",
language = "English",
volume = "2006-23",
series = "CentER Discussion Paper",
publisher = "Finance",
type = "WorkingPaper",
institution = "Finance",

}

Renneboog, LDR & Szilagyi, PG 2006 'Corporate Restructuring and Bondholder Wealth' CentER Discussion Paper, vol. 2006-23, Finance, Tilburg.

Corporate Restructuring and Bondholder Wealth. / Renneboog, L.D.R.; Szilagyi, P.G.

Tilburg : Finance, 2006. (CentER Discussion Paper; Vol. 2006-23).

Research output: Working paperDiscussion paperOther research output

TY - UNPB

T1 - Corporate Restructuring and Bondholder Wealth

AU - Renneboog, L.D.R.

AU - Szilagyi, P.G.

N1 - Subsequently published in European Financial Management, 2008 Pagination: 29

PY - 2006

Y1 - 2006

N2 - This paper provides an overview of existing research on how corporate restructuring affects the wealth of creditors.Restructuring is defined as any transaction that affects the firm's underlying capital structure.Thus, it reaches well beyond asset restructuring and includes transactions such as leveraged buyouts, security issues and exchanges, and the issuance of stock options.The analysis identifies significant gaps in the literature, emphasizes the potential differences between creditor wealth changes in market- and network-oriented governance systems, and provides valuable insights into methodological advances.Many issues obviously remain, as empirical evidence is still incomplete and focuses exclusively on the US.In network-oriented regimes, the potential for research remains constrained by the lesser development of bond markets that disclose information on creditor wealth shocks.Still, on-going debt securitization should now allow for the investigation of at least some critical issues.This is imperative, as the position of creditors in the firm differs substantially across governance systems despite the gradual convergence of these regimes across the world.

AB - This paper provides an overview of existing research on how corporate restructuring affects the wealth of creditors.Restructuring is defined as any transaction that affects the firm's underlying capital structure.Thus, it reaches well beyond asset restructuring and includes transactions such as leveraged buyouts, security issues and exchanges, and the issuance of stock options.The analysis identifies significant gaps in the literature, emphasizes the potential differences between creditor wealth changes in market- and network-oriented governance systems, and provides valuable insights into methodological advances.Many issues obviously remain, as empirical evidence is still incomplete and focuses exclusively on the US.In network-oriented regimes, the potential for research remains constrained by the lesser development of bond markets that disclose information on creditor wealth shocks.Still, on-going debt securitization should now allow for the investigation of at least some critical issues.This is imperative, as the position of creditors in the firm differs substantially across governance systems despite the gradual convergence of these regimes across the world.

KW - bondholder wealth

KW - corporate restructuring

KW - mergers and acquisitions

KW - event studies

KW - bond returns

M3 - Discussion paper

VL - 2006-23

T3 - CentER Discussion Paper

BT - Corporate Restructuring and Bondholder Wealth

PB - Finance

CY - Tilburg

ER -

Renneboog LDR, Szilagyi PG. Corporate Restructuring and Bondholder Wealth. Tilburg: Finance. 2006. (CentER Discussion Paper).